Skip to main content

tv   Closing Bell  CNBC  October 5, 2012 3:00pm-4:00pm EDT

3:00 pm
obviously. >> and meg whitman. >> hp stock hitting a nine-year low this week. the survey says today's letter of the day is "b" for big bird with 54% of your vote. >> that's cool. have a great weekend, america. >> thanks for participating. see you on monday. welcome to the "closing bell." i'm michelle cabrera in for maria bartiromo. the bulls not exactly celebrating here in the final hour. >> we're seeing stocks fall to the lows of the day, even though we saw the jobless rate fall below 8% for the first time in four years. all three major averages up about 1% for the week. look at where we stand right now. we were in new high territory for the dow jones industrial
3:01 pm
average, but that's fading fast here as you can see. nasdaq, similar situation. take a look there. just went negative, as you can see. the s&p 500 was set to close at a new high, 1465. that looks like it's not happening, as you can see. michelle. >> stocks were helped a bit today earlier on the jobs report. the unemployment rate fell below 8%. >> the conspiracy theorists debate the authenticity of those numbers. we'll get into that with the former labor secretary later. even if you believe this good news, it will only continue if america gracefully solves its debt issues. mohammed, thanks for joining us. first, give us your take on the jobs numbers. >> thank you, bob. i think michelle was right overall, it's a good report in the sense that we created over
3:02 pm
100,000 jobs. unemployment has come down and earnings are going up. but we're being helped by part-time employment and the structural issues are still there. so overall, it's a good report, but the market is right to question how good it can be sustained. of course, there's all the issues between the household survey and the establishment survey. >> what do you think about all those issues? they've led to a lot of conspiracy theories. we say the jobs numbers, and i think the average american thinks there's one jobs number, right? there's job growth. we find out what that number is. that is what leads to the unemployment number. but they're completely disconnected. we really see that today. jack welsh says there's a problem with the voracity of these numbers. >> i think what we're seeing is just a reality from month to month. over time they tend to converge. in any one month, you do get differences. this month is one of them. >> are they open to manipulation? >> i don't buy the conspiracy
3:03 pm
theory. there are certain people at pimco who do. i respect their point of view. this is just what happens when you have two different ways of collecting data. >> 115,000 jobs is certainly nothing to get excited about. the number is anemic. certainly not a bullish call. >> if you're going to fake the number, you do it big. >> absolutely. that's why i don't buy into it. you're just picking up the issue. it's a key element for the market. so step back. why is the market not as enthusiastic as some people would like it? because it realizes that we need to pivot. so far we've had a correct rally based on chopping off the tails of catastrophe. between what the fed has been doing and what the ecb has been doing, that has reduced the tail risks in the short term. in order to keep going, we need to hand off to fundamentals. today's employment report, while better, is not strong enough for that hand off.
3:04 pm
>> can i follow up with something you said earlier? you said there are other people at pimco who do believe it's a possible conspiracy theory. tell me more about that. is that bill? >> no, some other people on the trade floor. we go into incredible detail on this report. some say, hey, wait a minute, how could you have government jobs doing what they're doing? isn't it peculiar they're doing that now? we look at every element. whatever number you can pick, you can attach some conspiracy theory. i do not think, as i said earlier, that it stands the test of time. if you look over time, you go debt these inconsistencies. >> what i was a real estate reporter 20 years ago, there were people who thought we were manipulating the housing numbers back then. that was in the first bush administration. let me talk about the fiscal cliff a little bit. what's the deal going to look like? is there going to be a deal? describe what you think might happen here. >> so we put a 60 to 70% probable that there is a deal after the election, probably in the lame duck session or shortly
3:05 pm
thereafter. we think -- and there's a great piece on by my colleagues that details that. we think that will amount to about a 1 to 1.5% contraction in fiscal terms as opposed to the 4% contraction that we would get in fiscal terms from the fiscal cliff. it is possible, not probable, that we go over the cliff and it's possible we get a grand bargain. we put 60 to 70% that there will be some sort of compromise both parties can agree on. >> you don't think the chances of a grand bargain are not particularly great? that there's a long-term address to the whole issue of the fiscal deficit. >> unfortunately, not this time around. >> mohammed, earlier today, the founder of pimco tweeted out some investment recommendations, including buying spanish and italian bonds, government bonds, which sounds almost contrarian when we're so worried about what's going on with europe. what's the investment thesis behind that?
3:06 pm
>> it's simple. it is to respect what central banks are doing. i think the ecb has left no doubt in anybody's mind, including in its statements just yesterday that it is effectively all in. it is committed to buying as many bonds as it needs to up to three years in order to stabilize the markets. all it needs is the government to deliver. in the short term, ie the next few months and quarters, we believe that will hold. we believe spain will apply and the ecb will come in. therefore, there are certain bonds and certain maturities we find attractive. >> what kind of maturities, what kind of bonds? of course spain is trying to put this decision off past the regional elections. somebody is going to get hit here fairly badly. maybe even the prime minister himself. what's attractive specifically? >> so what's attractive is the fact that you have someone with a big printing press buying these bonds, which is the ecb.
3:07 pm
as long as you recognize that there has to be an exit, either through maturity or through market liquidity or through someone else buying them, then the bonds that fall in that category are attractive because, remember, the ecb has made it very clear. it believes there are two excessive risk premiums in the price of spanish bonds. one is a convertibility risk. the other is a financial fragmentation risk. they are committed to reducing that premium, which makes certain bonds attractive. >> here in the united states, you recommended tips, which is you buy a treasury, except it's protected from inflation. the house is worried about inflation. how badly? >> we are worried. we think if you are to look over a period of three to five years, inflation is more likely to be near three than the two target. we call it the reverse volcker moment in the sense that the fed has clearly indicated that its
3:08 pm
dual mandates are not equal. today, for good reasons, the employment mandate is higher than the inflation mandate and investment approach reflects that. >> mohammed, we're just near new highs, but obviously we're having trouble getting through to them. some people are arguing that the markets are going to do fairly well going up to the election since governor romney looks like he's doing better than people thought. what's your thought short term in the next month for the election and going into the end of the year? and i'm talking about the stock mark. >> so in terms of the elections, yes, governor romney is doing better because he had a better outcome in the debate. i think most people still recognize that he has a lot to do. remember, romney has to do two things. one, he has to convince that president obama has not delivered. second, he has to convince the american people he can deliver. so he has to do it both things. there's still some heavy sledding for him on both fronts. in terms of the market, i think that over the next few weeks and
3:09 pm
months we're basically going to be driven not only by the political process but whether we get data that confirms the handoff from central bank action to fundamentals will happen. otherwise, this wedge that the central bank have created between valuations of fundamentals cannot be sustained forever. fundamentals have got to start coming up towards valuations, otherwise valuations will come down. >> mohammed, thank you so much for joining us today. >> thank you, michelle. >> all right. we've got about 51 minutes before the closing bell. the nasdaq is lower by nearly 14 points. >> don't go anywhere. there's still a lot more ahead on this busy friday edition of the "closing bell." coming up, employment possibility. 58% of ceos say they plan to hire more workers within the coming year. is this a sign corporations
3:10 pm
expect a resolution to the fiscal cliff? the head of the world's largest executive search firm weighs in next. plus, bottling profits. the head of constellation brands uncorks the reasons behind the company's improved outlook. and knowing your audience. is it right for ikea to delete women from its ads in saudi arabia in order to make a buck? that's all ahead on the "closing bell." nsh up your game. up the ante. and if you stumble, you get back up. up isn't easy, and we ought to know. we're in the business of up. everyday delta flies a quarter of million people while investing billions improving everything from booking to baggage claim. we're raising the bar on flying and tomorrow we will up it yet again. you.piano ] we know you.
3:11 pm
we know you're not always on top of it. and how could you be? that often you just want... quiet. we know all that life demands from you. and how it's almost impossible for you to escape. almost. introducing a car made better for you in every way. the luxurious, all-new honda accord. it starts with you. [ male announcer ] how do you make 70,000 trades a second... ♪ reach one customer at a time? ♪ or help doctors turn billions of bytes of shared information... ♪ into a fifth anniversary of remission? ♪ whatever your business challenge, dell has the technology and services to help you solve it.
3:12 pm
whatever your business challenge, and get 3 years interest-free financing on tempur-pedic. but hurry, sleep train's inventory clearance sale ends columbus day. ♪ your ticket to a better night's sleep ♪
3:13 pm
the jobs report, of course, the main driver of the market today. so how is it possible we only added 114,000 jobs last month, which doesn't even keep up with population growth? but we had such a steep decline in the unemployment rate. senior economics reporter steve liesman is here to explain. the mystery, what is it? >> it's really the product, as you know. we have two separate surveys. the household survey, that's where we get the unemployment rate. it's the result of a nationwide survey of around 60,000 people. sounds big, right? well, it's historically very volatile. the payroll survey, that's where we get the number of jobs, the 114,000. that comes from a survey of around 140,000 employers. they submit actual data. it's favored by economists
3:14 pm
because it's steadier. but guess what? it's also subject to revisions. according to this report, we had 114,000 jobs in september. the household survey showed with 7.8% unemployment, it came from being 12.1 million unemployed divided by 151.1 million people in the labor force. they count themselves as available for work. what happened? what happened is the number of unemployed in this survey fell by 456,000. the number of people who had jobs went up by 873,000. that came partly, though, from an increase of people who are working part time for economic reasons, and there may be a seasonal issue at work here. it's the third september in a row we've had a surge like this. two different surveys, but they also count slightly different things and have their own trends while they even out over time. fortunately, there's a way to see if one is particularly out of whack. you adjust the household survey to the way they calculate the
3:15 pm
payroll one, including removing the self-employed that are counted. you can see that white line going up, down, up, down. guess where they end up? bottom line, job growth has averaged about 145,000 a month this year. what does the data say about the trend in earlier? like i said, economists rely on the payroll survey, which is also steadier. some economists say the household survey can do a better job leading the way out of a downturn. so bob, you don't necessarily want to ignore it. >> all right. thanks very much, steve. please stick around. don't go anywhere. our next guest has exclusive hiring information and a survey that shows 58% of companies plan to hire next year, but 69% are waiting for issues to be resolved. >> gary, good to have you here. first, what do you think of today's jobs numbers?
3:16 pm
do you believe them? do they reflect what you're seeing? >> well, i've probably met with 100 ceos over the last month. it's more of the same. this is not a standing ovation for sure. >> in terms of the numbers. i'm assuming you believe them and that it's not just a great number in terms of the way you look at it. >> no, it's reality. i mean, this is a decade of readjustment. there is a real fight for growth and relevancy today. if you talk to any ceo, and ceos today are looking to innovate then hire, not hire then no innovate. >> what sectors are you seeing where we're getting real hiring going on right now? >> well, the two most obvious are in health care. that'll be 20% of the economy. and technology. those two are very, very strong. on the other end of the spectrum is financial services where there's just a heavy state of paralysis today. >> what about wall street
3:17 pm
sector? i understand the younger people are no longer seeking to work there. is that because the salaries have come down so far? >> well, they've seen what happened over the last four years. everything is being re-regulated. the real issue today is everything is just in time. it's just in time for spain. it's just in time for the fiscal cliff. you know, ceos can read balance sheets. in america, for every $3, we're spending $4. that's just not sustainable. people want to see the plan from here to there. that's really the big issue here. >> is the fiscal cliff. 69% are waiting for the fiscal cliff and european stability issues to be resolved. we could be waiting a very long time for those things, right? >> well, that's why i say this is a decade of readjustment. this is the new normal. >> i was hoping you meant the last decade, not the coming decade. >> we've already lived through the readjustment. we're looking for the new one. >> look, it's not very
3:18 pm
encouraging when you look at the s&p where it is today. where it was in '99, right? look at average household income today. it's down 10%. those are not -- that's certainly not encouraging. if you're a ceo today, there's only three levers of growth you can pull. you don't have this conspicuous consumer anymore to rely on that ceos had. you can either innovate, consolidate, or you've got to look to the world's 7 billion population for growth. those are the three levers you have today. >> yeah, steve, 115,000 jobs created. certainly nothing to write home about. the private sector job growth was even a little bit more anemic. did you see anything in this jobs report that gave you some particular cheer about the future? give us a little good news. >> we talked about the two surveys, right? there's good stuff in the weak survey and bad stuff in the
3:19 pm
stronger survey that make you think, really, they're not telling a different picture about the economy. for example, the average earnings up. the workweek ticking up. that's inside the payroll survey. that business about it being a big surge in part-time employment for economic reasons, people who want a full time job didn't get it but did come into the work force. that was a negative on that huge surge in household employment. so i mean, i'm looking here, bob. i'm not immune to the idea we could be seeing a turning point here in jobs. but i'm not going to make that conclusion based on this report here. i think what's interesting about the survey you're talking about here is that one of the reasons why executives are waiting for the fiscal cliff and european crisis to be resolved is because they have the luxury to wait. if the customers were coming in the door, if the demand was visible, they wouldn't be waiting. they'd be hiring. that's what i think is critical here. >> gary, before we let you go, can you tell us what -- college
3:20 pm
graduates, give them some advice. what should they be looking into right now? what should they be majoring in so they're going to have jobs when they get out? >> well, should i say stay in school? no, i mean, look, education determines a worker's earnings for life. you know, this may sound crazy. you got to follow your passion. you've got to actually enjoy what you're doing. i would say something counterintuitive. i think over the next decade there's going to be insourcing. manufacturing in the americas, in the united states, is actually going to turn. >> we've already seen some of that. >> you're already seeing some of that. the costs in china and elsewhere, it's exploding. it's going up 20 to 30% a year. >> yeah, it makes a lot of sense when other parts of the world are doing better, their wages are going to rise and that competitive difference will eventually -- i don't think go away completely, but certain will it make us more
3:21 pm
competitive. >> i don't know about follow your passion. >> come on, come on. >> i'm not trying to throw cold water on the idea. we got to go. thanks very much. we got 40 minutes to go before the closing bell. dow jones industrial average essentially flat lining, though we are up on the week. the thatnasdaq went negative a t while ago. so in a bad economy, to people drink more? constellation brands is the toast of the town on wall street. >> we're talking about the business of booze with the constellation ceo, rob sands. his company is actually raising its profit guidance. good grape harvest. it's a first on cnbc interview. that's next. and the world's only tridion safety cell which can withstand over three and a half tons. small in size. big on safety. which can withstand over three and a half tons. when you take a closer look...
3:22 pm the best schools in the world... see they all have something very interesting in common. they have teachers... ...with a deeper knowledge of their subjects. as a result, their students achieve at a higher level. let's develop more stars in education. let's invest in our teachers... they can inspire our students. let's solve this. [ male announcer ] for the saver, and a big first step. for the spender who needs a little help saving. for adding "& sons." for the dreamer, planning an early escape. for the mother of the bride.
3:23 pm
for whoever you are, for whatever you're trying to achieve, pnc has technology, guidance, and over 150 years of experience to help you get there. ♪ [ male announcer ] the exceedingly nimble, ridiculously agile, tight turning, fun to drive 2013 smart. ♪
3:24 pm
motorists in california got some sticker shock at the pump today. gasoline prices jumping 17 cents overnight. . sharon here with the details. >> it's incredible. nearly $6 a gallon at some stations in southern california. stations talking about possibly running out of gas because of the high price. a lot of consumers worry it could happen to them. california is a special case based on the special type of gasoline that's required in that state. the refining issues that are servicing in california and elsewhere around the country are having an impact on prices. not only on the national average, but on different pockets. we are looking at prices that
3:25 pm
vary quite a bit across the country. from california, we also have in the south some of the cheapest gas, just over $3.50. in the new york area, over $4. the fact remains the national average at $3.79 a gallon is likely to go higher based on what we've seen in the futures market over the last several weeks. we are likely, some traders say, to see $4 gasoline as the national average by election day. more on that on back to you. >> thank you, sharon. shares of constellation brand up more than 3% today on strong earnings and a carr cheery outl. we'll be talking to the ceo in a moment. how does the stock compare? it's a booze battle. we'll start talking numbers. on the technicals, jeff is here. on the fundamentals, tim ramey. tim, let me start with you. what's going on? i'm hearing the grape harvest is good. >> the grape harvest is going to be good. i don't think that's a reason why the stock's so strong.
3:26 pm
part of is it their beer business. they're taking over half of the crown imports they don't own. that's a creative deal for them. that's good. also, we've seen a really nice turn in the wine business where we've got from excess pricing to it firming up. >> okay. obviously guinness is the key brand name here. what else do you like? >> well, you know, i don't follow diageo in particular. it's the mirror image of constellation. big spirits business. big beer business. small wine business. constellation is wines, beer, and a little bit of spirits. >> okay. thanks very much. let's look at the technicals. what do you like more? >> i like both of them. how can you not? you have great brands like you just mentioned. let's look at constellation first. that's the explosive one. you can see for most of the
3:27 pm
year, it did absolutely nothing until it broke out of this resistance level of about $24. that happened during earnings season, last july. or this july. it had a nice move, then consolidated. you can see from the two lines up here it consolidated for about a six-week period. again, what did we have today? earnings. boom, it powered up. now we're up 74%. what do you do? you need to be patient. you need to wait for this thing to consolidate or pull back. the last time it had earnings, you see right here it pulled ba back about 3%. we would be waiting for a 3% or more pull back. what i like about this stock is it's a steady eddy. not so explosive, but you can see over the last six months it has a nice upward trend. again, it broke above a resistance level of 105, had a
3:28 pm
nice move. we're going to be patient again, and we're going to wait for this stock to pull back to its 20-day moving average. as you can see, it mirrors the trend line, but it's also a little tired. it hasn't fallen below that 20-day moving average for almost six months. good buying area. >> okay. weal let you go and move on. michelle, let's talk more about constellation. >> yeah, let's see if they can keep this going. we turn to the constellation brand ceo robert sands. good to have you here. >> thank you, michelle. nice to be there. >> so a very nice beat. what helped you drive growth. >> i'm sorry, what did you say? >> you had a nice beat in the numbers. what helped you drive growth? >> we have some brands that are growing very well. some of our brands like woodbridge, our black box grand, our svetka brand. on the beer side, the crown
3:29 pm
joint venture. we have some explosive growth in plands like -- brands like medelo. >> you've gotten better pricing when it comes to wine and therefore it's not as sloppy and have higher margins? >> no, people are buying more, first of all. the wine category is very robust in general. you know, we've been working on brand building, and we've got great marketing and advertising campaigns out there for our brands. on the imported beer side, our demographic trends really favor our import portfolio of mexican beer brands. so a lot of good things going for us in that regard. >> when you say demographics, you mean because of immigrants or younger people or what? >> well, really, you know, in particular the hispanic population in the united states is growing at a very fast rate.
3:30 pm
our portfolio is almost 100% mexican. there's a great interest both amongst the hispanic population as well as the general market in latino products. so in general, those things favor continued growth in our beer business. >> yeah, we asked half jokingly -- i'm hispanic, by the way. we asked half jokingly, do people drink more during a weak economy? it does seem intuitive that your business would be countercyclical. is it? >> we don't say that the business is countercyclical. it's not particularly cyclical. you know, what we like to say is it's not recession proof, but it is recession resistant. as a general proposition, we don't think people drink more or less, but what we really see in tough economic times is what we call channel shifting. what we mean by that is people
3:31 pm
tend to drink more off premise, meaning at home, than they do on premise, at restaurants, bars, and so on, where it's more costly to drink. that channel shift really doesn't affect us from a margin or profitability perspective. >> the jobs number that was out today, i don't know if you got a chance to see it. the unemployment rate below 8%. job growth a little anemic. does that mirror what you see in the consumption pattern of your buyers? >> well, i think that, you know, what we've seen is with a slow recovery in the economy over the last couple of years, we have seen our beer business, which is probably the most cyclical part of our business, rebound quite nicely. you know, the on premise is still sluggish, albeit slightly up versus down big time. we think -- we see things improving in general, notwithstanding that the job growth is a little anemic.
3:32 pm
>> mr. sands, thanks so much for joining us. we really appreciate it. >> thanks for having me. >> okay. the dow a half hour to go in the closing bell. just in positive territory. just barely. we're still up about 1% for the week. nasdaq in negative territory. >> social video game maker zynga stock now down 70% since its ipo last year. that's no gain for the found r and ceo. find out how that plunge is impacting his dwindling bank account. plus, ikea under fire for deleting images of women in its saudi catalog. how much should the business compromise in nations that have views that are unacceptable to much of the world? tdd#: 1-800-345-2550 when i'm trading, i'm totally focused. tdd#: 1-800-345-2550 tdd#: 1-800-345-2550 and the streetsmart edge trading platform from charles schwab... tdd#: 1-800-345-2550 gives me tools that help me find opportunities more easily.
3:33 pm
tdd#: 1-800-345-2550 i can even access it from the cloud and trade on any computer. tdd#: 1-800-345-2550 and with schwab mobile, tdd#: 1-800-345-2550 i can focus on trading anyplace, anytime... tdd#: 1-800-345-2550 until i choose to focus on something else. tdd#: 1-800-345-2550 trade at charles schwab for $8.95 a trade. tdd#: 1-800-345-2550 open an account and trade up to tdd#: 1-800-345-2550 6 months commission-free online equity trading tdd#: 1-800-345-2550 with a $50,000 deposit. tdd#: 1-800-345-2550 call 1-866-294-5412. hahahaha! hooohooo, hahaha! this is awesome! folks who save hundreds of dollars switching to geico sure are happy. i'd say happier than a slinky on an escalator. get happy. get geico. melons!!! oh yeah!! well that was uncalled for. folks who save hundreds of dollars switching to geico sure are happy. how happy, ronny? happier than gallagher at a farmers' market. get happy. get geico.
3:34 pm
3:35 pm
if you think facebook's been a disappointment since going public, it's got nothing on zynga. facebook's decline pales in comparison. >> our wealth editor robert frank looks at the impact.
3:36 pm
let's start with julia on just how bad it is. >> it certainly looks lime game over after the company announced disappointing third quarter results. zynga shares are trading at new all-time lows. they were off more than 20% earlier today, though they have bounced back a bit. the problem here is that users are shifting away from social games to mobile apps and new titles like chefville and the 'ville are falling short of expectations. they've even pushed into mobile games but it's costly. they're writing off between 85 million and $95 million associated with that acquisition. because facebook drew 14% of its revenue from zynga in the first half of the year, this news today sent facebook's stock down over 2%. analysts have all lowered their estimates for facebook's payments revenue based on zynga's warning. in a blog, ceo mark pinkus wrote
3:37 pm
about zynga's potential in online games, but he acknowledged he needs to do some cuts. >> thank you so much, julia. before we get to robert frank, let's point out the dow jones industrial average has now gone negative in the session. the boost we saw from the jobs report earlier has completely disappeared. all right. julia was just telling you what's going on with zynga. no one is feeling it more than the founder. robert frank, how much is he feeling? >> back in march, he was silicon valley's latest billionaire. his 95 million shares were worth more than $1.3 billion. he joined mark zuckerberg and all the other young tech tycoons who suddenly became members of that ten-digit club. but zynga's falling share price has chopped more than $1 billion from his fortune. he's now worth less than $250 million. his paper wealth in zynga has fallen by more than 80%. he's lost, get this, more than
3:38 pm
$4 million a day or close to $200,000 an hour for the past seven months. now, we shouldn't feel bad for him. he sold $200 million worth of stock back in april before that big fall. he bought a $16 million mansion in san francisco. he's got a multimillion dollar home in aspen. plus, he's got a lot of other wealth from facebook and other investments. but mark is now proof that sudden wealth can quickly become sudden wealth loss in social media. of course, the new .com guys learned something new, to take that wealth off the table before it goes up in smoke. back to you, michelle. >> yeah, exactly. thanks, robert. we have about 20 minutes before the closing bell. the dow jones industrial average has now gone negative on the session. nasdaq's been there for about an hour. >> goldman sachs with a stunning market prediction. we'll tell you what it is and get the reaction next. don't go away. apple shares rallying more
3:39 pm
than 70% since the death of steve jobs one year ago today. will that last, or will the magic drain out without jobs' vision? both sides of the debate coming up. for what's around this corner... and the next. there's cash flow options from pnc. solutions to help businesses like yours accelerate receivables, manage payments, and help ensure access to credit. because we know how important cash flow is to reaching your goals. pnc bank. for the achiever in you. pnc bank. if we want to improve our schools... ...what should we invest in? maybe new buildings? what about updated equipment? they can help, but recent research shows... ...nothing transforms schools like investing in advanced teacher education. let's build a strong foundation. let's invest in our teachers so they can inspire our students.
3:40 pm
let's solve this. mike rowe here at a ford tell me fiona, who's having a big tire event? your ford dealer. who has 11 major brands to choose from? your ford dealer. who's offering a rebate? your ford dealer. who has the low price tire guarantee... affording peace of mind to anyone who might be in the market for a new set of tires? your ford dealer. i'm beginning to sense a pattern. buy four select tires, get a $60 rebate. use the ford service credit credit card, get $60 more. that's up to $120. where did you get that sweater vest? your ford dealer. don't have enough food to survive. we can't let this happen. there is something we can do about it. please join christina aguilera and yum! brands in the movement to fight world hunger by supporting the united nations world food programme. to donate, go to or make a text donation right now. your contribution will feed children and save lives. together, we can stop the dying and start the living.
3:41 pm
and together, we can move people from hunger to hope.
3:42 pm
it's a tale of two stocks at the nasdaq that don't like each other at all. apple is falling again while google hits another intraday high. bertha coombs is here with the details. >> take a look at apple now, trading well below its 50-day moving average, on pace to close there for the second week in a row. the stock did climb quite a bit since july. meantime, you've got google on pace to close today, even though well off the highs, pulled down by the apple downdraft. it is on pace to close at yet another record closing high. interestingly, take a look at what's happened in the last month since both of them have closed out above $700. apple has been on the trend down while google has certainly been the big wave.
3:43 pm
unfortunately, guys, google not as big a wave and in the nasdaq composite, it's still about market cap. >> all right. thank you, bertha. goldman sachs putting out a startling call for the market, predictsi -- predicting a new all-time high. they say it will plunge and come all the way back to hit 1575 by the end of next year. >> reaction now from our guests. who cares about goldman sachs? we have morgan stanley here. >> even more bear herish. >> they're a great firm. we think it could go to 1167 between now and year end because of the fiscal cliff. even if it doesn't all hit, earnings we think will be down 1.3% next year. so we think the earn dings --
3:44 pm
>> the overall earnings will be down? >> yes. markets at 115 and we're at 98. there's a $17 spread between ours. we think goldman is very reasonable. >> 20% for the next three months? >> that would be down 20% over the next three months. we're going into earnings season. let's see how they come out. energy, materials, and financials are supposed to be down and the overall down 5%. >> goldman says this is primarily about the fiscal cliff. do you agree? >> i think it's going to be very heavily earnings driven where you get china and europe in the picture too. i think fiscal cliff is partial. it will be a partial cliff. it won't be a huge dropoff. it will be a partial dropoff, in our humble opinion. we think the consumer and the low interest rates and europe and china mean you're not going to have much earnings next year. that's really our big call. >> are you scared after what he said? >> no, not at all. >> do you agree, disagree? >> it doesn't really change our
3:45 pm
view on what we're doing. we're buying cheap assets, things like emerging market equities that's trading at 12 times earnings. >> but if he's right, all those assets can get a lot cheaper in the next three months. >> true, true. but what the fed is doing in terms of pumping ining liquidit the market. it's pretty supportive. >> why so pessimistic though? give us a particular reason. most people think that if it's even close to a 10% drop, there's going to be plenty of buyers. a lot of people are underperforming so far this year. >> no question the housing numbers have been pretty good. no question the job numbers were a surprise to the upside today, especially with the house hold survey. our feeling is it's basically the slow down in the global economy and the slow down in the u.s. economy next year. we are looking for 1.4%, which is very near stall speed for a recession. so you really are looking at this economically.
3:46 pm
your margins are three deviations above normal. >> your favorite idea right now. >> probably mortgages. you can buy agency and nonagency mortgages, pools of mortgages that are yielding 6, 7%. >> but they're high risk? >> short duration. they're not that high risk. delinquencies and defaults go up by a factor of two, you're still protected. >> all right. thank you. only 14 minutes to go before the closing bell. nasdaq's been negative for a while. president obama is out on the campaign trail trying to score points he probably wishes he scored at wednesday's debate. >> governor romney plans to let wall street run wild again, but he's going to bring down the hammer on "sesame street." it makes perfect sense. >> why are we subsidizining "sesame street" when elmo alone makes millions? and later, the greatest
3:47 pm
swimmer ever may now be known for another sport. look at this. something he did on the golf course today might be talked about more than all those gold medals in swimming and the putt keeps going. we're going to show it to you. >> another record for michael phelps. unbelievable. [ male announcer ] the 2013 smart comes with 8 airbags, a crash management system and the world's only tridion safety cell which can withstand over three and a half tons. small in size. big on safety. [ male announcer ] how do you make 70,000 trades a second... ♪ reach one customer at a time? ♪ or help doctors turn billions of bytes of shared information... ♪ into a fifth anniversary of remission? ♪ whatever your business challenge, dell has the technology and services to help you solve it.
3:48 pm
we were just driving along, comin' back from the lake, and all of a sudden, ka-plam. it blindsided us. what is it? our college savings account. how do you think it happened? not sure. i think something we bought a while ago turned out to be something else, annnnnd, i remember a lot of other stuff in there had the word "aggressive" in it. is everyone okay? well, now, yeah. who knows later. ♪ with the blackish-blue frame and the white dots and the splattered paint pattern, your lights are on. what? [ male announcer ] the endlessly customizable 2013 smart.
3:49 pm
3:50 pm
let's get to jackie deangelis with a market flash. >> hey, michelle. watching shares of chipotle. session lows on this stock today. it's getting hit today, but earlier this week when david einhorn soured at the name. for the day, we're down about 4.3% or $11 -- $12.60. down about 11.5% for the week. rough week for chipotle. back to you. >> cover the kids' ears. "sesame street" is now a political football.
3:51 pm
mitt romney shot at funding pbs at wednesday's debate. >> today, president obama took it on as well. >> for all you moms and kids out there, don't worry, somebody is finally getting tough on big bird. rounding him up. elmo's got to watch out too. governor romney plans to let wall street run wild again, but he's going to bring down the hammer on "sesame street." >> i know everybody wants to be sympathetic to big bird and to "sesame street." i love the product. it was started the year i was born. >> thanks, bring that up. >> why does taxpayer money need to go to a product that is clearly so profitable? they have toys. they have games. they make money from licensing and revenue. why do taxpayers have to subsidize that? as a stand alone business, "sesame street" will do just fine. >> doesn't the profit from all those toys go to the nonprofit group? there's a children's television
3:52 pm
workshop that gets the money. >> they nonprofit, so why does taxpayer money subsidize a nonprofit? >> you can make an argument easily that helping a start-up organization like that 40 years ago, look at the good it's done in the country. >> so now 40 years later we should still keep funding them? >> your point seems to be like we should shut it down because, why, the company was successful? >> no one is talking about shutting down pbs. no one is talking about shutting down "sesame street." why does taxpayer money still fund it? if you take away the taxpayer money, it will do just fine. it's not going anywhere. >> i don't have a problem with the concept of spinning off organizations that are really successful. i have a problem with the idea that we should necessarily shut down pbs, which is what a lot of people are arguing. >> who said shut down pbs? >> that's been the debate for a while. >> they raise money privately. >> what's the budget there? >> you know what? not a relevant question. what is the role of government? the role of government should be limited to certain things. >> i'm just talking about big
3:53 pm
bird. i think that the country probably will do fine funding big bird for another few years. >> that's not the point. >> i think we'll be fine. >> you know we add another $400 million there, $400 million here. it's real money, bob. >> what do we have, a $4 trillion budget? >> you would blow $400 million because you like big bird? >> what benefit are we getting from having something like a national public radio? what benefit do we get out of that? i think we get benefits out of that. if you argue, why should we go to the moon? >> individuals will give money to them. that's how we do most organizations in this country. >> as you can see, we agree. up next, we're coming right back with the closing countdown. >> critics saying something is wrong with the jobs numbers today. the labor secretary rejecting those charges earlier. >> i'm insulted when i hear that because we have a very
3:54 pm
professional civil service organization. >> so what does the woman who used to hold that job under president bush think of the numbers? you might be surprised by her answer. that's later here on the "closing bell." you.
3:55 pm
we know you. we know you have to rise early... and work late, with not enough sleep in between. how you sometimes need to get over to that exit, like, right now. and how things aren't... just about you anymore. introducing the all-new, smart-sensing... honda accord. it starts with you.
3:56 pm
♪ [ male announcer ] this is karen and jeremiah. they don't know it yet, but they're gonna fall in love, get married, have a couple of kids, [ children laughing ] move to the country, and live a long, happy life together where they almost never fight about money. [ dog barks ] because right after they get married, they'll find some retirement people who are paid on salary, not commission. they'll get straightforward guidance and be able to focus on other things, like each other, which isn't rocket science. it's just common sense. from td ameritrade.
3:57 pm
about five minutes to go until the closing bell right now. dow jones industrial average just off the lows. we were up earlier but gave up most of the gains. nasdaq has been in negative territory for a while. time for the closing countdown. >> david is back with us. also with us is kenny from i-cap. good to have you here. >> pleasure. >> poof, all the excitement about the jobs report just gone. >> we had the initial rally this morning, the euphoria. >> why? >> it's friday afternoon. i think the markets had the great move. people are suspect of the number. so they took money off the table. i think it makes perfect sense considering next week is earnings season. we're going to start off in earnest and see how it goes. we're prepared for a less than stellar earnings report. i think the market is tired. >> you think now we're going to have a tough time into the
3:58 pm
elections? there are a lot of people who think going into the elections with governor romney looking a little bit better, this will be supportive of the markets. >> i think it will be, but i think we're going to have the continued volatility. i think we're going to keep hitting our head at 1475, which is what we've done the last three or four times. >> don't talk to david, because we're talking down 20% here. >> october has had in the past a lot of crashes in it, okay. it's also been a bear killer. t.a.r.p., with things turned around and started back up, october. however, in election years since 1950, october is the worst month on average. >> october 19th is the 25th anniversary of the 1987 crash. >> don't forget, the fed has given you the check. take all the money you want and buy whatever you want. where is this market really going to go?
3:59 pm
it cannot correct itself. >> you talked about the things happening next week that could move the markets, there's a lot of stuff going down in europe next week, but you didn't mention them. >> i think you at least shake them off until they rear their ugly head. the minute something doesn't go right, it comes to the forefront again. >> we're still near highs. i don't think the market cares about europe. >> it doesn't care about europe until there's a real disaster. >> it's just been quiet this week. >> we're at highs, bob. >> i know. >> it's a manufactured high, though. if the fed wasn't there, the market would not be where it is. >> everybody agrees the fed and the ecb have been influencing the market. if the fed wasn't intervening this year, where would the s&p be? >> 122 of the 146 points up have been within three days of fed announcements. >> thank you. >> he didn't say ecb. he said fed. >> thank you. >> we have a big crowd down here


disc Borrow a DVD of this show
info Stream Only

Uploaded by TV Archive on